Category: simonblack

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August 11, 2014
London, England

[Editor’s note: Tim Price, frequent Sovereign Man contributor and Director of Investment at PFP Wealth Management, is filling in while Simon is teaching at his entrepreneurship camp.]

On September 9th, 1965, US Navy pilot James Stockdale was shot down over North Vietnam and seized by a mob.

He would spend the next seven years in Hoa Lo Prison, the infamous “Hanoi Hilton”.

The physical brutality was unspeakable, and the mental torture never stopped. He would be kept in solitary confinement, in total darkness, for four years.

He would be kept in heavy leg-irons for two years and put on a starvation diet.

When told he would be paraded in front of foreign journalists, he slashed his own scalp with a razor and beat himself in the face with a wooden stool so that he would be unrecognizable and useless to the enemy’s press.

When he discovered that his fellow prisoners were being tortured to death, he slashed his wrists to show his torturers that he would not submit to them.

When his guards finally realized that he would die before cooperating, they relented.
The torture of American prisoners ended, and the treatment of all American prisoners of war improved.

Jim Collins, author of the influential study of US businesses, ‘Good to Great’, interviewed Stockdale during his research for the book. How had he found the courage to survive those long, dark years ?

“I never lost faith in the end of the story,” replied Stockdale.

“I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining moment of my life, which in retrospect, I would not trade.”

Collins was silent for a few minutes. The two men walked along, Stockdale with a heavy limp, swinging a stiff leg that had never properly recovered from repeated torture.

Finally, Collins went on to ask another question. Who didn’t make it out ?

“Oh, that’s easy,” replied Stockdale. “The optimists.”

Collins was confused.

“The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’

And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’

And Easter would come, and Easter would go. And then Thanksgiving. And then it would be Christmas again. And they died of a broken heart.”

As the two men walked slowly onward, Stockdale turned to Collins.

“This is a very important lesson. You must never confuse faith that you will prevail in the end – which you can never afford to lose – with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

At the risk of stating the blindingly obvious, this is hardly a ‘good news’ market. Ebola. Ukraine. Iraq. Gaza.

In a more narrowly financial sphere, the euro zone economy looks to be slowing, with Italy flirting with a triple dip recession, Portugal suffering a renewed banking crisis, and the ECB on the brink of rolling out QE.

What are the implications for global stocks?

On any fair analysis, the US market in particular is a fly in search of a windscreen.

Using Professor Robert Shiller’s cyclically adjusted price / earnings ratio for the broad US stock market, US stocks have only been more expensive than they are today on two occasions in the past 130 years: in 1929, and in 2000.

Time will tell just how disappointing (both by scale and by duration) the coming years will be for US equity market bulls.

But we’re not interested in markets. We’re interested in value opportunities incorporating a margin of safety.

If the geographic allocations within Greg Fisher’s Asian Prosperity Fund are any guide, those value opportunities are currently most numerous in Japan and Vietnam.

The Asian Prosperity Fund is practically a poster child for the opportunity inherent in global, unconstrained, Ben Graham-style value investing.

Its average price / earnings ratio stands at 9x (versus 17x for the S&P 500); its price / book ratio stands at just one; average dividend yield stands at 4.2%.

And this from a region where long-term economic growth seems entirely plausible rather than a delusional fantasy.

Vice Admiral Stockdale was unequivocal: while we need to confront the “brutal facts” of the marketplace, we also need to keep faith that we will prevail.

To us, that boils down to avoiding conspicuous overvaluation and embracing equally conspicuous value – where poor sentiment is likely to intensify subsequent returns.

In this uniquely oppressive financial environment where the skies are darkening with the prospect of a turn in the interest rates, optimism could be fatal.

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August 7, 2014
Vilnius, Lithuania

In an unbelievable display of arrogance and self-importance, the Australian government recently announced the most sweeping changes to their national security legislation since 9/11.

The new laws will give the Australian government more powers to monitor all types of communication, both phone and internet.

What’s more, telecom companies will be required to store searchable metadata of all activity for two years, enabling the authorities to access details of every phone call made and every website visited.

Powers for “extended detention” and ‘preventative detention’, (pre-crime) have also been extended.

I’m sure it makes you feel better knowing that you could be preventively detained without actually committing any crime—you know, just in case…

It will also become a crime now to travel to a country where terrorists are ‘conducting hostile activities’ unless you have a ‘legitimate excuse’.

Just how these travel bans will be decided upon is unclear. Is Ukraine off limits? Spain? Northern Ireland? Thailand? Russia?

All of this is supposedly necessary because, according to the government, there are 125 Australian citizens currently part of terrorist groups overseas.

Even if correct, 125 people represent 0.0005% of the population of Australia. So for 125 people, the other 24+ million must be subjected to a Big Brother police state.

It all makes even less sense when your read the official justifications for it. Australia’s Prime Minister Tony Abbott said that:

“We are under a lot of budget pressure at the moment, but the community won’t thank us if we skimp unreasonably on national security.”

Ironically, he admits they don’t have the money for it. But they’re going to come up with an ADDITIONAL $630 million (a significant amount of money in Australia) to boost domestic spying and police state programs… all for 125 people.

But the prize for the dumbest comment you’ll hear this week goes to another pearl of wisdom from the Australian Prime Minister:

“The terrorist threat in this country has not changed, nevertheless it’s as high as it’s ever been.”

Now, as a native English speaker, I’m not entirely sure what he’s trying to tell me.

The government didn’t spend this money last year, and nothing happened.

But now since, according to the PM, nothing has changed, suddenly the government has to spend an additional $630 million to terrorize and spy on citizens.

What a brilliant piece of logic wrapped up in political Newspeak.

Basically they’re telling everyone that they should just be afraid… and that the government must spy on citizens in order to protect them.

This is how it always happens… and we can watch yet another country slide rapidly into a police state.

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August 6, 2014
Vilnius, Lithuania

When you think about “strong banking”, what country comes first to mind?

A few years ago, the most obvious answer would be Switzerland.

Today, however, Switzerland’s reputation for banking is nowhere near where it once was.

Starting in 2009, the US, as chief financial bully, led the charge in assaulting the country’s banking sector and dragging it down brick by brick.

The pummelling has continued ever since, culminating in the end of banking secrecy in the country altogether.

Meanwhile, as Switzerland endured one blow after the next, the Chinese renminbi (RMB) quietly slipped past the steadfast Swiss franc to become a more popular currency for use in trade settlements.

Eager to restore some of its former banking luster, Switzerland has taken note of this and is rapidly positioning itself to become a major center of European RMB trade.

So the government of Switzerland recently signed a bilateral currency swap agreement with China, enabling the two countries to buy and sell up to 150 billion RMB or 21 billion Swiss Francs of each other’s currencies.

Switzerland is just the latest to join the queue, as nearly 25 other central banks already signed similar agreements with China.

Every few weeks, and with increasing frequency, we’re hearing news of the next country that is accepting China’s future financial primacy.

There’s no denying that both sovereign nations and market participants are accepting the validity of the RMB as a major trade currency. This is no longer an anomaly, but part of an obvious trend.

To be fair, it’s not that the RMB is a shoe-in for the next global reserve currency—because the country and its currency undoubtedly both have problems.

What’s really being revealed with these latest developments is relative confidence.

It may not be clear whether or not the RMB will make it to the top, but what is clear to everyone is that the USD is going down.

Here we see ambitious countries like the UK and Switzerland proactively trying to adapt to and take advantage of the changing financial climate.

The sole tactic of the US government, on the other hand, is to lash out at countries which make them feel threatened.

They rally the whole world against Russia for acts of war. They blast China as a currency manipulator.

And all of this as if the US wasn’t dropping bombs by remote control drone… or heavily manipulating its own currency.

This has accomplished nothing other than to demonstrate just how weak and insecure the former financial superpower has become.

Continuing to believe that the dollar is going to maintain its global reserve status is now not only foolish, but financially hazardous. To countries, businesses and individuals.

Those that accept these changes and try to get out in front of this trend will do incredibly well. They are the ones who will survive intact when the financial system resets.

Those who ignore the trend do so at their own peril.

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August 5, 2014
Vilnius, Lithuania

Roughly a month ago, my colleague Tim Price wrote an article exposing CYNK Technology Corp.

The day we published, the stock (OTC: CYNK) had a market cap in excess of $1 billion; it rose to more than $6 billion at its peak.

All this with one employee, no assets, no revenue, no website, and no product… What could possibly go wrong?

The CYNK bubble was, of course, the result of carefully planned deceit and clever promotion by a handful of people who stood to make a lot of money on the trade.

CYNK’s overvaluation was so outrageous that at one point the company was worth more than US Steel, the 13th largest steel producer in the world with 42,000 employees, $17 billion in revenue, and $414 million in operating cashflow.

Needless to say, CYNK was a complete and total scam. And it’s appalling that anyone actually believed it.

But when you think about it, CYNK’s stock wasn’t really any dumber than owning US Treasuries.

Across the entire global financial system, US government debt is considered the global “risk-free” benchmark against which other assets are measured.

Yet every shred of objective evidence suggests that the US is one of the LEAST creditworthy borrowers in the world.

The US government’s own numbers show they have net worth of NEGATIVE $16.9 trillion. And the Congressional Budget Office projects this figure getting far worse.

But still, the golden tale is spun: the US can never default on its debt.

People are told that US government can always raise taxes in order to pay back the debt.

But the numbers show a completely different story.

Since the end of World War II, ALL tax rates in the US have varied wildly. Individual income tax rates, for example, have been as high as 90%.
Yet the government’s total tax revenue has always hovered at around 17.7% of GDP.

It’s never mattered how much they raise tax rates; so this assertion that the government can simply raise tax rates to pay back the debt is a total farce.

Even worse, investors somehow take comfort that the United States can just print more dollars, as if hyperinflation is a credible debt management strategy.

But truth be damned, investors keep buying US Treasuries.

It doesn’t matter that inflation-adjusted, tax-adjusted interest rates GUARANTEE that you will lose money.

It doesn’t matter that the US is the largest debtor in the history of the world.

It doesn’t matter that they cannot raise tax revenues to pay back the debt.

It doesn’t matter how close they’ve come so many times to default.

It doesn’t matter that the economy is supposedly so great that the Fed cannot possibly bring itself to raise interest rates by even 0.25%.

And it doesn’t matter that they have yet another looming crisis in six months when the debt ceiling suspension ends.

(Congress even required, by law, that the Treasury Department NOT build up a cash reserve in the event of a government shutdown. It’s sheer lunacy…)

Somehow this is still considered “risk free”. But just as they did with CYNK, reality always catches up.

In the case of CYNK, it only took about a month for the bubble to inflate and burst.

The Treasury bubble, on the other hand, was built on credibility earned over decades by previous generations.

They defeated the Nazis. They stood up to the Soviet Empire. They designed magnificent infrastructure. And they went out and built it with their bare hands.

They celebrated Jonas Salk and Albert Einstein, not some self-absorbed reality TV starlets.

And they didn’t have safety nets or expect to be taken care of at taxpayer expense.

It was far from perfect. But previous generations earned the world’s trust. Modern day politicians have blown through it.

Now all they have left is their snake oil sales pitch. And a mountain of obligations that closed July 2014 at a record high $17.69 trillion.

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August 4, 2014
Kiev, Ukraine

There’s nothing more permanent than a temporary government measure, as the old saying goes.

I was reminded of it when I came back to Kiev over the weekend and that the Ukrainian government imposed a series of “temporary” taxes to help the war effort.

And boy does this government need money.

According to both Ukrainian and Russian news sources, several hundred solders were left without weapons or ammunition and crossed the border into Russia.

The Ukrainian news suggests that this was a forced withdrawal after being routed by rebel forces. The Russian news suggests that the troops were seeking asylum, no doubt tired of war.

So the Ukrainian government is in a hurry, trying to raise at least $1 billion (a lot of money here).

They’ve jacked up wage taxes, natural resource taxes, and even taxes on farming exports.

But even if they collect the money they’re aiming for, Ukraine and its government are in a serious pinch.

For the last few months, even before the turmoil began, Ukraine has been in an inflationary cycle. Both retail and asset prices were spiraling higher.

Now they’ve entered a stagflationary period. The currency has gone into freefall. Unemployment is rising. The economy is contracting (6% by phony government estimates). And inflation is a whopping 19%… and rising.

These people are getting abused. And the worst is yet to come.

The banking system is borderline insolvent. The head of the local Citigroup branch here said that the non-performing loan ratio in Ukraine is as high as 40%.

And potentially up to 4% of all bank assets are now locked down in Crimea, which may or may not even be part of Ukraine any longer.

If the banking system collapses (and many here suspect it will), this place will become unglued. Asset prices will collapse, yet retail prices will surge even higher.

I can already see it on the street; so many businesses have closed. Hopeless unemployed youths are now roaming the city or joining the war effort.

And the entire populace has been mobilized to support the fight.

Of course, it’s pretty damn easy to cheer on the bloodshed when it’s not your blood. War can seem glorious when you only have to read about it in the newspapers.

There’s so much more I need to tell you about—the only way for me to capture this was in another podcast, probably the most emotional I’ve ever done.

Come listen for yourself:

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“Let us learn our lessons. Never, never, never believe any war will be smooth and easy, or that anyone who embarks on that strange voyage can measure the tides and hurricanes he will encounter. The statesman who yields to war fever must realise that once the signal is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events.

“Antiquated War Offices, weak, incompetent or arrogant commanders, untrustworthy allies, hostile neutrals, malignant fortune, ugly surprises, awful miscalculations – all take their seats at the Council Board on the morrow of a declaration of war. Always remember, however sure you are that you can easily win, that there would not be a war if the other man did not think he also had a chance.”

– Winston Churchill, ‘My Early Life’, quoted by Charles Lucas in a letter to the FT, 23rd July 2014.

And there is a war being conducted out there in the financial markets, too, a war between debtors and creditors, between governments and taxpayers, between banks and depositors, between the errors of the past and the hopes of the future. How can investors end up on the winning side ? History would seem to have the answers.

For history, read in particular James O’Shaughnessy’s magisterial study of market data, ‘What Works on Wall Street’ (hat-tip to Abbington Investment Group’s Peter Van Dessel). O’Shaughnessy offers rigorous analysis of innumerable equity market strategies, but we are instinctively and philosophically drawn most strongly towards the value factors highlighted hereafter.

The chart below shows the results accruing to various strategies across the All Stocks universe – all companies in the Standard & Poor’s Compustat database with market capitalisations above $150 million, a dataset which comprises between 4,000 and 5,000 individual companies. The analysis takes in over half a century’s worth of data.

Making the (fairly reasonable) assumption that the data in this study is sufficiently broad to mitigate the effects of shorter term market “noise”, the results are unequivocal. Buying stocks with high price-to-sales (PSR) ratios; buying stocks with high price / cashflow ratios; buying stocks with highprice / book ratios; buying stocks with high price /earnings (PE) ratios; all of these are disastrous strategies relative to the performance of the broad index itself. Caution: these all happen to be ‘growth’ strategies.

But the converse is also true – in spades. Buying stocks with low price-to-sales ratios; buying stocks with low price / book ratios; these are both outstandingly successful strategies over the longer term, converting that initial $10,000 into over $22 million in each case. Buying stocks on low price / cashflow ratios is also a winning strategy. The relatively simple ‘high yield’ and ‘low p/e’ strategies also comfortably outperform the broad market. Note that these are all ‘value’ strategies.

This leads O’Shaughnessy to question the legitimacy of the so-called Capital Asset Pricing Model, in which investors are compensated for taking more risk:

“..the higher risk of the high P/Es, price-to-book, price-to-cashflow, and PSRs went uncompensated. Indeed, each of the strategies significantly underperformed the All Stocks Universe.”

Perhaps the market is indeed less efficient than certain academics would have us believe. The world’s most successful investor, Warren Buffett, would seem to think so. As he was quoted in a 1995 issue of Fortune magazine,

“I’d be a bum on the street with a tin cup if the markets were always efficient.”

And note that careful addition of the word “always”. Buffett wasn’t even going so far as to suggest that the markets are never efficient, but rather that the patient investor can take advantage of Mr. Market’s occasional lapses into the realms of absurdity, whether in the form of bullishness or outright despair.

O’Shaughnessy frames the returns from these various ‘growth’ and ‘value’ strategies more explicitly in the chart below.

Special pleaders on the part of ‘growth at any cost’ might argue that the time series is insufficient. But if 52 recent years – easily an investor’s lifetime – taking in at least two grinding bear markets are not enough, how much would be.

Again, the conclusions are clear. Buying stocks on low price-to-sales ratios is a winner, tying with stocks on a low price-to-book ratio with an annualised return over the longer term of 15.95%. Low price-to-cashflow is also a stellar performer. Buying stocks with a high yield also beats the broad market, as does buying stocks with low price / earnings ratios. Again, these are all explicit ‘value’ strategies.

Since we appear to be living through something of a speculative bubble (a bubble inflated quite deliberately by explicit central bank action), it is worth recalling one prior instance of ‘growth’ outperforming. As O’Shaughnessy points out.

“Between January 1, 1997 and March 31, 2000, the 50 stocks from the All Stocks universe with the highest P/E ratios compounded at 46.69 percent per year, turning $10,000 into $34,735 in three years and three months. Other speculative names did equally as well, with the 50 stocks from All Stocks with the highest price-to-book ratios growing a $10,000 investment into $33,248, a compound return of 44.72 percent. All the highest valuation stocks trounced All Stocks over that brief period, leaving those focusing on the shorter term to think that maybe it really was different this time. But anyone familiar with past market bubbles knows that ultimately, the laws of economics reassert their grip on market activity. Investors back in 2000 would have done well to remember Horace’s Ars Poetica, in which he states: “Many shall be restored that are now fallen, and many shall fall that are now in honour.”

“For fall they did, and they fell hard. A near-sighted investor entering the market at its peak in March of 2000 would face true devastation. A $10,000 investment in the 50 stocks with the highest price-to-sales ratios from the All Stocks universe would have been worth a mere $526 at the end of March 2003…

“You must always consider risk before investing in strategies that buy stocks significantly different from the market. Remember that high risk does not always mean high reward. All the higher-risk strategies are eventually dashed on the rocks..”

This might seem to imply that there is safety simply in the avoidance of explicitly high-risk strategies, but we would go further. We would argue today that central bank bubble-blowing has made the entire market high-risk, with a broad consensus that with interest rates at 300-year lows and bonds hysterically overpriced and facing the prospect of interest rate rises to boot, stocks are now “the only game in town”. We concede that by a process of logic and elimination, selective stocks look way more attractive than most other traditional assets, but the emphasis has to be on that word “selective”. We see almost no attraction in stock markets per se, and we are interested solely in what might be called ‘special situations’ (notably, in ‘value’ and ‘deep value’ strategies) wherever they can be identified throughout the world. We note, in passing, that markets such as those of the US appear to be virtually bereft of such ‘value’ opportunities, whereas those in Asia and Japan seem to offer them in relative abundance. In this financial war, we would prefer to be on the side of the victors. If history is any guide, the identity of the losers seems to be self-evident.

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August 1, 2014
Tallinn, Estonia

What a disaster.

For the second time in the last fifteen or so odd years, Argentina has defaulted on its debt. And as we reported a few weeks ago, there was no easy way out.

Years ago, most of the creditors that Argentina had stiffed in 2001 agreed on a settlement; they accepted a much lower payment than they were actually owed, figuring that getting -some- money back was better than nothing.

But a handful of bondholders, known collectively as the ‘holdouts’, didn’t take the deal.

These were the people who, you know, actually wanted to get paid what they are obliged to receive.

This is the basic equation of credit. One person lends money. The other person borrows money. In any reasonable deal, the lender is supposed to have some sort of recourse to recover his/her capital when the borrower defaults.

If you default on a mortgage, the bank takes the house. Stop making car payments and they send the repo guy to take your vehicle. When a business fails, bondholders can often liquidate the company’s assets.

Argentina has plenty of assets. The government has nationalized just about everything they can get their hands on, including the really despicable theft of a Spanish oil company’s assets.

Clearly this is a government that feels perfectly fine taking other people’s assets when it suits them. But they’re not willing for others to do the same.

So the holdouts sued.

Eventually they found a sympathetic judge in the United States who ordered Argentina to STOP making payments to all the other bondholders until the government could reach an agreement with the holdouts.

I know what you’re thinking– what gives some judge in the United States authority over a sovereign nation?

Nothing. Except that he threatened them with the kiss of death: if Argentina failed to comply with his instructions, he would banish them from the US banking system.

Now… imagine you’re the finance minister of some developing nation out there, watching this all unfold in the newspapers.

Would reading about all of this inspire more confidence in the US government? Would it make you want to continue relying on the US banking system? Use the dollar? Or even hold Treasuries?

Probably not.

The Argentina debacle is a lot of things. But one important lesson is that the rest of the world is watching very closely… and thinking, “No way do I want to end up like that.”

This is a HUGE reason why other countries are now starting to form their own international finance system. They’d rather rely on China and Russia than the Land of the Free.

And the US government is practically begging them all to run away like scalded dogs, further accelerating the decline of the US and the dollar’s dominance.

Argentina’s economic minister summed it up best from New York the other day when a reporter asked him about how a potential default would affect the rating agencies’ outlook on his country.

He said, “Who believes in the rating agencies?” After all, these were the guys who completely missed the 2008 financial crisis… who were slapping AAA ratings on toxic debt, and never accepted responsibility for it.

Why do they still have such a dominant role in the global financial system? And for that matter, why does the dollar?

Why indeed. And as the US keeps up this kind of behavior, it won’t for long.

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July 31, 2014
Tallinn, Estonia

In the absurdly best-selling book The 7 Habits of Highly Effective People, author Stephen Covey wrote about abundance vs. scarcity.

With the abundance mindset, people confidently view the world as full of resources and opportunities… that there’s more than enough to share… and that more success is coming soon.

The opposite is the scarcity mindset, where people view everything as scarce and finite. If you’re winning it’s because I’m losing.

The scarcity mindset reinforces that there’s never enough time, never enough money. And since we can never be sure about the future, we have to ration every last possible resource and grab every bit for ourselves.

This ‘scarcity’ mindset pretty much sums up tax policy in most ‘rich’ Western nations.

In the US, tax revenue as a percentage of GDP has been almost exactly 17.7% of GDP since the end of World War II.

It hasn’t mattered how much they’ve raised tax rates; when tax rates go up, overall tax revenue, i.e. the government’s slice of the GDP pie, stays about the same.

For years they’ve been bleeding cash.

Yet rather than say “How can we support abundance? How can we help set the right conditions to make the PIE bigger,” they punish and intimidate everyone.

The Land of the Free is one of the only supposedly civilized nations in the world where you can be criminally convicted and thrown in jail over tax discrepancies.

They maintain one of the LEAST competitive corporate tax rates in the world, and then blame the companies who have a problem paying that much.

They need the money. There’s never enough. So they’re obsessed with bullying citizens for every last penny they can get their hands on.

It’s classic scarcity mentality.

Thousands of miles away, Estonia is one of the few countries that gets it.

Estonia has reduced taxes to a low, flat rate of 21%. And this number has been falling; from 26% in 2004, it hit 21% in 2008 and has remained at this level since.

One major innovation here is that Estonian companies are only taxed when they actually make a distribution.

In other words, a company that reinvests its profits back into the business pays ZERO tax.

Not to mention there are tremendous incentives and financing programs available for startups. So building a business here is definitely a great option.

Plus there’s no estate tax– the Estonian government isn’t looking for its ‘fair share’ when you die. There’s no gift tax or wealth tax either. It’s Paul Krugman’s worst nightmare.

But perhaps most importantly, the ENTIRE tax code itself is just 43 pages, and filing a return can be done online in just minutes.

In contrast, the US tax code could fill entire football stadiums. And tax preparation wastes tremendous resources that could otherwise be put to productive use.

But here’s the incredible thing: Estonian tax revenues, GDP, and standard of living have been rising year after year.

And at roughly 10% of GDP, Estonia has a laughably low debt. In fact, Estonia has the LOWEST general government debt of any country in the EU.

In Estonia they have truly worked to make the pie bigger. It’s an abundance mentality, plain and simple.

Now, let’s pretend for a minute that you’re flat, crazy, dead broke. And there’s a guy down the street who really has his stuff together.

He has a nice house, he’s saved money, he’s conservative, and he’s doing quite well.

Wouldn’t it make sense to learn from this person?

Wouldn’t it make sense to spend a little time checking out what they’ve done right, what they’ve learned, and see how you could apply that to your own life?

Sure it does.

But not if you’re the US government. Or France, Spain, Italy, etc.

Their only approach is to ignore the obvious success of other countries who have figured it out.

Instead their scarcity mentality pushes them to continue confiscating, intimidating, and terrorizing in a desperate, failed attempt to make ends meet.

It’s quite sad. But this is our reality.

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